Several news sources reported confirmation from Westpac's management yesterday that it had cut 560 positions.The bank said a number of staff would be redeployed, so actual redundancies would be between 300 and 400.The Finance Sector Union said part of the job-cutting program involved sending 150 jobs overseas.ANZ issued a round of redundancy notices two weeks ago, cutting 130 jobs in its Australian division. The cuts were to back office roles in retail, business banking and SME operations.Efficiency is the big theme in banking in 2012, as banks adjust to low growth in home and business lending, and productivity is going to be a big driver of earnings growth. For some of the big banks costs ran ahead of revenues last year and investors are keen to see expenses reined in.ANZ's cost to income ratio rose from 46.5 per cent to 47.4 per cent during the 2010/11 financial year, making it the worst performer among its peers on expense management.ANZ's operating income increased eight per cent in the year to September, while operating expenses rose 10 per cent. In the second half of the financial year, from March to September, operating income fell three per cent, while operating expenses fell one per cent.Westpac reported a one per cent increase in operating income for the year to September and a two per cent increase in expenses. Westpac launched a productivity program in October 2010, which delivered $289 million of efficiency gains in 2010/11. The bank stepped up the program in August, targeting bigger gains in the current financial year. Staff numbers were reduced by 767 in 2010/11National Australia Bank's expense management figures looked better but deteriorated in the September half. For the full year net operating income rose 5.7 per cent and operating expenses fell 1.4 per cent. However, in the second half of the year income was flat, while expenses rose 0.2 per cent. In November, Commonwealth Bank issued a September quarter earnings update, in which it reported that costs grew at a greater rate than its revenue during the quarter.Analysts highlighted disappointing second half results in their wrap-ups of the big banks' 2010/11 financial reports and questioned where the growth would come from in the year ahead.They noted that outlook statements have gone from being confident that demand for lending would rebound to being hopeful, at best."The banks delivered zero growth in pre-provision profit during the September half," said UBS analyst Jonathon Mott."We believe that the banks are structurally challenged, with consumer and business preference for deleveraging likely to prevent a material recovery in credit growth."A lot of profit growth was driven by reductions in bad debt charges but analysts questioned whether there would be much more to be gained from that source in the year ahead.If there are gains to be made they will come from cost reductions and business efficiency programs.